A U.K. Exit From EU Offers No Promise of Better Fortunes

By Clive Crook -
Nov 27, 2012

Britain has always had mixed
feelings about the European project. From the start of the drive
to “ever closer union,” the U.K. feared being left out, yet
never quite wanted to get with the program. In some ways, it
signed up mainly to slow the whole thing down. Lately its doubts
have grown. According to a new opinion poll, a clear majority of
the British want to quit the European Union altogether.

Increasingly the feeling is mutual. A partnership can
tolerate only so much reluctance. In a television interview this
week, Italian Prime Minister Mario Monti (more tolerant of
British ambivalence than many other European leaders) said he
found that “the English manage to be quite exasperating when
they ask, as a condition for remaining aboard this great
European ship, particular exceptions, particular dispensations,
that could amount to making holes in the ship and making it sail
less well, if not sink altogether.”

Those dispensations never end. At the creation of the euro,
the U.K. recused itself (a good move, it now thinks, despite an
economic slowdown of impressive dimensions all its own). It
wants nothing to do with parts of the EU’s planned response to
the economic crisis, including proposals for a banking union and
closer fiscal integration. London is unwilling, as always, to
make EU budgetary contributions according to the same formula as
other member states: Protecting Britain’s so-called rebate is
ever the main goal of its policy on Europe.

Separation Agreement

At some point, enough is enough. Maybe a separation on
friendly terms would be better for all involved. Well, it might
come to that, and it’s wrong to dismiss a British decision to
leave as “unthinkable.” Equally, though, since moving the
country to a better location would be difficult, Britain ought
to think hard about what divorcing Europe would mean.

Continued access on free-trade terms to the EU’s single
market would be crucial for the U.K.’s prosperity. British
euroskeptics like to point out that Norway and Switzerland, two
of Europe’s richest countries, have free-trade agreements with
the EU without being members of the union. True enough, but one
shouldn’t read too much into this.

As a member of the European Economic Area, Norway is
obliged, in effect, to accept EU obligations as a matter of
course. Switzerland, as a member of the European Free Trade
Association but not the EEA, is freer to negotiate its terms --
but the value of this privilege is questionable, because the
negotiation is hardly between equals. In working out their
deals, both outsiders have had to accept EU norms on product
standards and other trading rules without being able to
influence their design.

Leaving the EU doesn’t mean winning independence from it.

In addition, the U.K. couldn’t take for granted membership
in the EEA and/or EFTA. Both would have to be negotiated with
the existing members -- meaning the EU plus Norway,
Liechtenstein and Iceland in the case of the EEA; and Norway,
Switzerland, Liechtenstein and Iceland in the case of the EFTA.
The U.K.’s arrival would transform these peripheral trade pacts.
The existing members might think twice before letting that
happen. At best, the new arrangements needed for Britain to
thrive as part of the European economy (though not of the EU)
wouldn’t fall instantly into place just because it quit the
union.

Granted, there would also be benefits. The U.K.’s budgetary
contribution to its European partners would fall. The obligation
to support the EU’s stupid farm policies certainly wouldn’t be
missed. And as a member of the EFTA, Britain would be free to
negotiate free-trade agreements with other countries -- possibly
including the U.S., again if prospective partners were willing.

Shrinking Britain

The main thing, though, is that the U.K. would stand aside
from the EU’s larger political and geopolitical ambitions. For
the most trenchant euroskeptics, this is really the point:
Britain’s power of self-government and its weight in the world,
they say, are surrendered when it pools sovereignty with its EU
partners. The other side argues exactly the opposite: For a
medium-sized country alone on the edge of an integrating Europe,
pooling sovereignty is the only way to protect those assets.
Without that, self-government and international clout are mere
delusions.

The choice is more finely balanced than either admits. In
or out of the EU, steadily rising living standards are possible
but not guaranteed. In or out, Britain’s global weight will
diminish, a function of the country’s continuing and inevitable
relative economic decline. The right answer -- and this goes not
just for the U.K. -- isn’t fixed one way or the other. It
depends on the kind of union the EU strives to be.

In the worldview of many a British euroskeptic, there are
equal measures of chauvinism and fantasy. But there’s a good
measure of justified frustration, as well, over the EU’s
persistent constitutional deficits. The union has the
accoutrements of democracy but little real democratic
accountability. The single currency was one result: overreach on
a calamitous scale.

A pattern has been set. For decades, political integration
was pushed much faster than the solidarity needed to sustain it.
The economic crisis is widening this gap still more, and to a
dangerous point, as Europe’s leaders strive to meet surging
protests over EU governance with a forced march to closer
political union.

Tiresome as the U.K.’s perpetual grievances may be, they
aren’t groundless. The EU needs to be less ambitious, not more.
If it continues to presume a solidarity that doesn’t yet exist,
it will end up failing everybody -- with or without its most
reluctant member.

(Clive Crook is a Bloomberg View columnist. The opinions
expressed are his own.)